Bogus charge-off, eerie silence, what now?
January 6, 2010 2:39 PM   Subscribe

Apartment rental company claims we broke our lease and charged us a not-insignificant fine ($1200) but they never notified us of this. They sent our account to a collections agency. However, their claim is incorrect in the first place -- according to the contract, we don't owe them anything. How should we proceed? There are a number of important details.

We moved out of an apartment complex in May 2009. Our move-out was verbally okayed by the office administration (over the phone) and we consulted with them before moving out. No mention was ever made of anything amiss. We are kicking ourselves for not having gotten their blessings in writing, but it's too late now.

About a month later, my wife is suddenly being deluged with phone calls from a debt collection agency. Turns out the rental company later decided we somehow broke the lease, and charged us about $1200. However, they never notified us of this by any means -- no phone call, no letter, no email, no voicemail, no nothing. They had our new address and have always had our phone number. According to some policy they have, they sent our account to collections exactly 14 days after they charged us.

We have read the rental contract carefully, and we are sure we are in the right. There is no way we owe them this money. Furthermore, this company has a history of major administrative mistakes -- on two previous (unrelated) occasions, they misfiled important paperwork relating to our account, and on another occasion (a year earlier) their "paperwork" indicated to them that our apartment was vacant despite the fact that we were in mid-lease. Our rent was always paid in full and on time.

We sent a letter (by registered mail) to both the apartment company and the collections company, advising them that we dispute this charge and asking them to stop trying to collect it until we sorted it out. The rental company responded with a letter saying "yes you do owe us this money" letter with no details about the contract, and the collections company responded with a pile of paper representing its correspondence with the rental company (they seem to be primarily interested in proving that we are the people named by the rental company).

The calls have stopped; we haven't heard anything from the collections agency for over a month. They used to call incessantly on Monday afternoons. We have ignored every single phone call, and our only communication with them has been by mail.

What should we do now? Are we about to get sued? Is it worth it for us to talk to a lawyer? Is this bogus charge-off going to affect our credit?

A major wrench in the gears is that the rental manager with whom we always conducted our business (signing the lease, paying rent, straightening out the mistakes their company was constantly making) has transferred to a different branch across town.

This was in Chicago, Illinois, though we now live a few states over.
posted by anonymous to Law & Government (9 answers total)
Small claims court?
posted by Carol Anne at 2:54 PM on January 6, 2010

I'm a lawyer, but I'm not a landlord-tenant lawyer and I'm not your lawyer. This might not be the law in your jurisdiction and I'm speaking totally off the cuff here. But generally speaking, leases are held to a higher standard for writings than other enforceable agreements are. I think you should reconsider the fact that youre claiming a verbal agreement to modify a residential lease with no consideration (sounds like you didnt give them anything of value in return for letting you out early) and no third-party witnesses or documents.

I think if it were me, I'd ask if they could please not touch my credit if I just pay the $1200.
posted by jock@law at 3:11 PM on January 6, 2010

I believe that since you have already been sent to collections it may have impacted your credit already, so offering to pay it off in that case is probably not a good idea.

It's unclear from your story whether, in fact, your moving out did violate the terms of your lease (I think Jock is assuming that is the case but to me it doesn't seem clear from what you've written). Step one would be to call a tenants' rights organization in Chicago and get some real advice as to whether you're liable here. Step two would be checking your credit to see if this is showing up.

Then you can figure out what to do next, which might simply be to dispute the negative report on your credit if you feel you can demonstrate you are in the right. But don't take any precipitate action like paying someone some money, because that might end with the negative report on your credit anyway, which seems to be your priority in resolving.
posted by miss tea at 3:24 PM on January 6, 2010

It sounds like this is a large apartment management company you're dealing with. If so, have you contacted the regional office? (I wasn't sure from your question)

I had a similar problem, where my lease was up, I'd confirmed verbally with the folks in the office that I was moving out, and then suddenly I was getting a phone call from the apartment manager that I was going to owe them a month's rent at the month-by-month rate. I called the folks who managed her, explained calmly what had happened, and they got it sorted out for me.
posted by Blue Jello Elf at 4:14 PM on January 6, 2010

It sounds like what happened was the landlord let you move out, re-rented the place, and then billed you for the gap during your unfulfilled lease. At least, your information is vague enough to give this implication, and it isn't something else like damage over and above your security deposit. You have to understand that this is essentially their legal right under the lease -- the point of it, in fact. If you wanted to be released from the contract, yes, you would need to get that in writing for it to be provable in housing court.

Yes, Chicago has housing court, and they have tenants' rights advocacy groups, and more tenant-friendly ordinances than average. So you might have some options here, but it may also cost you more effort and money than the $1200 seeing as you are now out of town. I think jock@law might have your best outcome here -- a settlement involving keeping your credit report clean. It doesn't even necessarily have to be the whole shebang -- offer half or even less as a start -- cash money if they give you a release from the debt in writing and report it as paid in full. It's worth a try. You might even be able to have a local attorney do the negotiation (window shop).

But yes, you needed to be more careful on move-out, probably. You don't say what happened to your security deposit -- was it returned, or converted to rent? I'm pretty sure the latter is prohibited in Chicago unless you agree in writing, but it's still a pretty common practice. Anything they communicated with you in writing about the deposit is possibly usable in showing their thinking. Was there a move-out checklist/inspection? Do you have photos of the condition of the apartment? Anyway, for instance, I can imagine a phone conversation something like "Can we apply the security deposit to your unpaid rent?" and you agree, not realizing they meant deduct it from your back rent instead of in place of the total amount.

Anyway, it would help if you were clearer about when your lease ended or the dispute over when it ended or whatever the other basis of dispute is.
posted by dhartung at 4:18 PM on January 6, 2010

Did you break your lease? Did you get a deposit back?
posted by Monday at 9:59 PM on January 6, 2010

Out of curiosity, can you tell us what apartment rental company this is? I too live in Chicago and want to be sure to steer clear of them.
posted by Elminster24 at 12:49 AM on January 7, 2010

follow-up from the OP
Thanks for the responses so far.

Sorry for being vague about the exact conditions of the lease. We're pretty sure we're in the right and did not break the lease. Assuming that's the case, what can we do? We never got a chance to discuss this with the rental company before they silently charged it off; we were never even notified of any problem until the collectors started calling. That's probably the most irksome part of this whole business.

If we are in the wrong, then (as jock@law says), I'm sure we'll just have to bite the bullet. But please assume we're right for the purposes of this AskMe. Can the rental company be forced to "undo" the charge-off? Should we even bother?

Will the collection agency attempt to sue? Given that we live in another state now, that sounds like it would be expensive and inconvenient. Do we need to be proactive on this, or is no news good news?

The rental company is "Central Park Townhomes", which owns several properties in Chicagoland.
posted by jessamyn at 2:54 PM on January 7, 2010

This is not legal advice, but I was in a very similar situation as you, believed I was in the right, and had to pay anyway after fighting it for 3 years. This was in Texas, though.

Unless you get a release from the lease agreement in writing from the landlord, you could be screwed. You gave notice over the phone and don't have documentation. The person who could testify to this in court is no longer employed there.

If you don't pay, it'll sit on your credit for years... I figured so what, tried to wait it out, fought it, stopped hearing from the company (once you tell them in writing to stop contacting you, they will) but then it put a mark on my credit saying I was a bad tenant and not to rent to me. Well, every landlord that pulled my credit after I sold my house said they couldn't rent to me until I showed a receipt showing the previous landlord I paid the debt. After 8 rejections, I buckled and paid it. The mark was on my credit until 2013; I couldn't couch surf for 4 years or anything like that.

So yeah, my advice would be read the lease and get a lawyer's free consultation if you can. Or pay it. Or don't move or apply for a home loan for 7 years, or whatever is applicable in your state, but that's what happened to me, if it helps.
posted by Unicorn on the cob at 9:10 PM on January 7, 2010

« Older Argentinean Web Programmer   |   Therapy: do not want Newer »
This thread is closed to new comments.